Sainsbury's: have they had it or will they make a comeback?

Sainsbury's have got a fight on their hands if they want to retain their place in the market... and of course, it isn't looking too great for the supermarket at the moment.

While most supermarkets are downsizing, because consumers have voted with their feet and walked away from the megastores, Sainsbury's are doing the opposite, and have just opened a behemoth of a shop in Wandsworth which is 80,000 square feet in size.

Sainsbury’s has already taken millions of pounds of write-downs on their property value, but Saino's chief finance officer John Rogers said that this new expanded store is proof that they're fighting back. They'll be doing similar projects in Fulham, Ladbroke Grove and Whitechapel. There's a hope that they'll be recouping money through in-store concessions with Jessops and Argos.

However, Goldman Sachs issued a warning, saying that supermarkets needed to cut space by roughly 20% if they want to survive in the current market. This excessive space is costing Sainsbury's a lot of money, as they are expected to report its first annual pretax loss tomorrow. That'll be their first loss in a decade, complete with their £628m of write-downs thanks to sites they've decided to stop developing.

A couple of months ago, the retailer reported a 1.9% fall in fourth-quarter like-for-like sales, which is their fifth quarterly decline on the bounce.

One of the things that chief exec Mike Coupe hopes to revive the company is a double-teaming with Dansk in a bid to bring Netto back to the UK. If Aldi and Lidl are doing well, then everyone might go for some bargains at Netto. Sainsbury's themselves are looking to simplify the way they sell things too, with £150m in price cuts and better promotions.

2 comments

Jessie J.

Lidl and Aldi only do 3 or 4 types of 1 product. I.e only 3 types of baked beans. This is why they have smaller store footprints than the Mega stores of Tesco, et al. If you want choice then you need the space, otherwise small stores equals less choice.
Do it like a brother,